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The Huachipato laminate plant recently had to close its activities because Chinese competition forced it to leave the national market. This has obviously negative consequences for workers. The Archbishop of Santiago, Monsignor Fernando Chomali, has expressed the following regarding this situation: “the footwear, textile and many other industries were allowed to fall. Now, the Huachipato steel mill. “This process will only bring misery and poverty to thousands of families.” These words from the Archbishop denote a clear and positive stance in defense of workers and criticism of the prevailing economic model.
The partial closure of the steel industry is an inevitable consequence of the free trade agreements signed by Chile, in this case with China. We are obliged, by virtue of these commitments, to keep our economic borders open to laminate from China – and to all the products that that country wants to sell us – which, being cheaper than those produced in Chile, eliminate ours from the market. . There is no compassion here. It is a battle to the death: whoever has greater productivity, or lower costs, or greater support from his government, will have lower prices and will keep the market. The other one will have to die. That is the logic of the commercial system in which we are involved.
What does Chile gain from that? The eventual gain is given by the fact that just as China can enter the Chilean market with its laminates, and leave dead and economically injured in its wake, so we can also freely enter the Chinese market with our agricultural or mining products, and enjoy there from a situation of comfortable competitiveness. We are thereby sacrificing Huachipato and its laminates, to favor our agriculture with its cherries, and mining with its copper or lithium. In other words, we are sacrificing the possibility of advancing in the field of industrialization, to consolidate our status as primary producers and exporters.
This is not something that only happens in the field of the steel industry, but has been happening for several decades throughout our entire economy. Archbishop Chomali, with obvious pain and disappointment, adds that “this is a journey of no return that will impoverish Chile.” Archbishop Chomali is right that there are not many reasons to be very optimistic about an eventual change in the situation described. But the world is dynamic and changing and is not frozen in the current correlations of forces and interests.
Even if Chileans are accused that with these trade agreements we have sold our soul to the devil, there are still some possibilities to correct the situations we have created. All treaties usually have exception lists, consisting of sets of goods with respect to which it is agreed that the general reduction of tariffs will not be applied. There are also safeguard clauses, which are trade situations that allow countries to take measures to defend their economy when a trade situation is causing serious damage to it. In addition, each country has the possibility of suing another when it is considered that it is engaging in unfair trade practices, such as dumping or subsidies, and there are institutionalized mechanisms to resolve these disputes. Finally, there is always the possibility of renegotiating what was previously negotiated, which can only be done when each country is willing to give up on some things and win on others. And it must be taken into account that even for the countries that dominate the international economic scene, political, military or economic circumstances occur in which the need to generate or strengthen their alliances and to have attitudes more inclined to negotiations with their new partners is strengthened. or former business partners.
But to take advantage of these circumstances, you must be clear from the beginning about the goals you hope to achieve and move accordingly in that direction, aware that it is a long and difficult struggle. But a path, no matter how long, always begins with a first step.
By Sergio Arancibia